AirAsia sells 25 aircraft to US private investment firm for US$768mil

AirAsia Group chief executive officer Tan Sri Tony Fernandes said the transaction was part of its ongoing transformation into something more than an airline. NSTP/SAIFULLIZAN TAMADI.

AirAsia Group Bhd, Asia`s leading low-cost carrier, has sold 25 existing aircraft to AS Air Lease Holdings 5T DAC, an entity indirectly controlled by Castlelake LP (Castlelake), in a deal valued at US$768 million.

Castlelake is a US-based global private investment firm and an experienced leader in aircraft ownership and servicing.

Castlelake will also buy from the airline`s wholly-owned Asia Aviation Capital Ltd (AACL) four new aircraft to be delivered in 2019.

The 25 existing aircraft (A320-200ceo and A320neo) under Merah Aviation Asset Holding Ltd, as well as the four new aircraft to be delivered (A320-200ceo), will be leased back to AirAsia Bhd and/or its affiliates.

"The transaction is subject to the approval of the group`s shareholders and other relevant customary closing conditions, and is expected to be completed in the second quarter of 2019," AirAsia Group said in a statement today.

AirAsia Group chief executive officer Tan Sri Tony Fernandes said the transaction was part of its ongoing transformation into something more than an airline.

"As we move towards becoming a travel technology company, the disposal of these aircraft will not only unlock significant value but also bring us closer to our goal of being a truly digital company.

"Years ago, many analysts criticised us for having high gearing and owning assets. Now many understand why we did that. In a few years, our digital strategy will be understood as well," he said in the statement.

Castlelake managing partner Evan Caruthers said: "Castlelake is pleased to support AirAsia as it pursues its strategic goals by offering full-service leasing and capital solutions."